EBay steps softly into daily-deals marketplace

Monday

Oct 15, 2012 at 12:01 AMOct 15, 2012 at 10:26 AM

EBay has quietly launched an online marketplace for deals on local services, taking on Groupon and expanding into a potentially big category. The news of eBay's deals service emerged as the e-commerce company unveiled a major redesign of its website, adding Facebook-like features it hopes will spur more sales.

EBay has quietly launched an online marketplace for deals on local services, taking on Groupon and expanding into a potentially big category.

The news of eBay's deals service emerged as the e-commerce company unveiled a major redesign of its website, adding Facebook-like features it hopes will spur more sales.

Called eBay Lifestyle Deals, the daily deal offers are being run in a limited number of urban areas, including the San Francisco Bay area, Los Angeles and Washington.

Recent deals included $12 for a one-hour dog-walking service worth $25; $50 for a month of yoga classes worth $110; and $180 for six private gym sessions worth $360.

The move is potentially a big step for eBay, which traditionally has focused on products, rather than services.

"We have a big marketplace and a lot of people who come to eBay don't just come for one thing - they stay and buy across categories," said Devin Wenig, president of eBay Marketplaces.

"It makes perfect sense to experiment with new categories, and services is one of these things. We're seeing whether deals and services are attractive to our customers."

EBay has teamed up with the start-up Signpost, which arranges the deals with merchants and posts them on a new section of eBay's online marketplace, www.ebay.com/exp/lifestyle-deals.

"Signpost is a merchant, just like merchants selling physical goods on eBay," Wenig said. "A merchant may sell local or even global services on eBay in the future."

BIA/Kelsey, which tracks the local media industry, expects U.S. consumer spending for online deals to reach $5.5 billion by 2016, up from $1.8 billion last year. That includes daily deals and other discounted online sales channels, such as product deals and flash sales.

Groupon CEO Andrew Mason has estimated that the total local-commerce market is worth $3 trillion.

EBay has run daily deals on physical products for about two years, but this is its first foray into discounted services in the United States.

Groupon started the daily deal craze in late 2008 and quickly grew into a company with thousands of employees and well over $1 billion in annual revenue.

That growth attracted a lot of deep-pocketed rivals, such as Google Inc., Amazon.com Inc. and Facebook Inc. However, growth has slowed recently as consumers tired of endless deals from multiple providers. Facebook shelved its first effort in the market last year.

Groupon shares have lost about three-quarters of their value since the company went public last year.

However, Google and Amazon have stuck with their daily deal businesses.

Wenig and other eBay executives also unveiled a big website redesign that includes a new "Feed" service, which makes product suggestions on consumers' eBay home page, based on their shopping history.

Feed also lets consumers tailor their eBay pages. For example, a user can have the feed automatically add a hard-to-find record by a favorite band, or the latest item available from an eBay seller by a favorite designer.

The feed has a "follow" feature reminiscent of Facebook's "like" function, which sends related updates to users' News Feeds.

"E-commerce is either utilitarian, where you can do a lot of business quickly, or engaging. We think the future is doing both," Wenig said. "Today is our opening move in this direction."

Facebook's early efforts to expand in e-commerce, known as f-commerce, have had mixed results. However, the social network is sticking with the initiative, because it is such a big opportunity.

Facebook users share a lot of information about themselves, and this can be useful for retailers and merchants because they may be able to get a sense of what consumers are planning to buy.

Facebook recently partnered with a small group of retailers on a test that allows users to "want" an item. The company also launched a gift-buying program on its network.

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